LLC formation
February 24, 2023
by a searcher from University of California, Berkeley - Haas School of Business in Kansas City, MO, USA
This is not legal advice but just my experience with creating a couple of LLCs recently. Thought it might be helpful perspective for others.
1) I setup an LLC towards the end of last year for the purposes of my search. I used a well-known online service to do this and now have serious buyers remorse! It's not much money in the scheme of things (about $400 out of pocket) but they also charge you that recurring fee each year for that amount. The scammiest part of this in retrospect is the EIN charge of $100. I recently went to the IRS website and this is at the top of the page where you apply for an EIN on IRS.gov. "Applying for an Employer Identification Number (EIN) is a free service offered by the Internal Revenue Service. Beware of websites on the Internet that charge for this free service."
2) I setup another LLC this morning for my wife, who recently started her own business. Took me maybe 20 minutes on Missouri's website and a grand total of $50. Could not have been easier.
Your mileage may vary but I would never pay an online service to setup an LLC in the future.
from Villanova University in West Chester, PA, USA
I do want to note that when you set up the LLC with the Missouri Secretary of State website, that's just making a filing with the secretary of state of the certificate of formation, which is important but only one of a few steps to complete in forming an LLC. An LLC isn't legally effective, won't protect from liability, and you can't set up bank accounts unless you also have a limited liability company agreement or operating agreement. Part of my startup services also include checking that the name isn't infringing on the rights of others which is about a 5 step process through various avenues.
If it's a multimember LLC, you'll also need the limited liability company agreement or operating agreement to include all of the eventuality provisions such as buy/sell, drag along and tag along rights, contribution requirements, distribution rights, what happens in the event of death or incapacity of the member (also necessary for single member LLC's), etc and you may need a unanimous member consent to authorize certain formation acts.
Just want to share as a heads up so you're able to continue the forward process on the LLC formation until it's complete. If you search "[state] limited liability company law" or something similar, you should be able to find all of the regulations that state all of the requirements for the formation to be complete.
from Hofstra University in New York, NY, USA